Leawood, Kan.-based Tallgrass Energy Partners LP (TEP) (NYSE:TEP) announced that Tallgrass Development LP has offered TEP the right to purchase a 33.3% interest in Tallgrass Pony Express Pipeline LLC for total consideration of $600 million.
The Pony Express project includes the conversion of an approximately 430-mile natural gas pipeline and the construction of an approximately 260-mile southward pipeline extension that will result in an oil pipeline from Guernsey, Wyo., to Cushing, Okla. Additionally, the project will include the construction of an approximately 66-mile lateral in Northeast Colorado that will interconnect with the mainline.
The company expects to place the mainline in service this year and the Northeast Colorado lateral in service by next summer.
A Conflicts Committee of the Board of Directors of TEP’s general partner, consisting solely of independent directors, will evaluate the offer with assistance from external advisors. The transaction remains subject to final review, negotiations, and approval by the Conflicts Committee and the board of directors of TEP’s general partner.